2009 - %3, March

GOP Hispanic Outreach FAIL

| Fri Mar. 6, 2009 2:12 PM EST

From the conservative website Right Wing News (via The Next Right):

I was talking to a very credible Capitol Hill source (who wishes to remain anonymous) today and that person told me a story that just blew my mind...

He told me the United States Hispanic Chamber of Commerce's 19th Annual Legislative Conference will be taking place next week in DC.

Here's the kicker: supposedly, the Democrats have 20 senators scheduled to attend various events and receptions. The Republicans? Are you ready for this? They have no senators currently scheduled to attend. Zero. Nada. Zilch.

You know what's great about this? This is easy minority outreach for Republicans. It's not like they're being asked to go visit the NAACP or speak to an immigrants' rights march. This is the Hispanic Chamber of Commerce, an organization filled with business leaders who presumably have wealth, oppose regulations, and want to see lower corporate taxes. And yet, when the Right Wing News author followed up with the HCC (my acronym), the staff there confirmed that Republicans were taking a pass.

Hispanics are the fastest growing minority in the control and will soon dominate politics in the western United States. Effective Hispanic outreach by the Dems and a complete lack of attention by Republicans could mean long-term Democratic control of Colorado, New Mexico, Arizona, and Nevada, all current or former key swing states.

Update: Ryan Grim reports that Republican lawmakers have been embarrassed into attending the HCC conference! That was quick.

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Are the GOP's Blacks Getting Sloppy Seconds?

| Fri Mar. 6, 2009 1:40 PM EST

Black people never run out of conspiracy theories. This is because there's no way we could have ended up in this position without diabolical whites plotting against us all the time. Usually, the theories are either just plain paranoid (e.g. the CIA floods the inner city with crack) or perhaps better explained by other facts (maybe you're unemployed cuz you smoke dope in your mama's basement all day and not cuz The Man won't let a brother get ahead). But every now and then, they make me stop and go hmmm. Like this one. In the Daily Beast, Stanley Crouch writes:

"A fundamental aspect of black barbershop disparagement—what you might call a suspicion of things as they seem to be—is that white people never give any power toys over to black Americans until they are through with them. Or unless they are so rusty that only a fool could not see how far beyond repair those toys actually are."
"The people taking those positions are not defeatists, or do not think of themselves that way. Their sense of the world is not based in Frederick Douglass' observation that power does not give the opposition anything without a fight. They merely think that color rules are hard, fast, and very different. Power is never given or trusted in the hands of those who are not white."

He is, of course, talking about Michael Steele's so far disastrous run as RNC chair. One might even extend the theory to Barack Obama (remember the Onion's classic summation of his election.)

So, brothers get to run a country and a political party brought to its knees by rich white men. Whites get to sit back and throw stones while they try to clean up someone else's mess.

Hmmm...maybe we're not paranoid after all.

How to Make Cap-and-Trade Into a Bad Joke

| Fri Mar. 6, 2009 1:38 PM EST
Via Gristmill, I see that Sen. Jeff Bingaman (D–NM), chairman of the Energy and Natural Resources committee, has decided to preemptively surrender on global warming:

Bingaman said any Congressionally developed system capping and trading emissions probably will include carbon allowances given to polluters like cement factories and coal-burning power plants, along with permits that are sold.

Auctioning 100 percent of the permits would essentially make polluters pay quickly for emissions. In the European Union's Emissions Trading Scheme, emissions permits were given away to polluters at first. This led to a glut of permits and windfall profits for some emitters.

...."I think it's unlikely we will pass a cap-and-trade bill with 100 percent auction," Bingaman told reporters at the Platts Energy Podium.  He said such a system has the risk of substantially increasing the burden on some utilities and major emitters.

There are lots of bells and whistles that you can add to a cap-and-trade plan: safety valves, circuit breakers, banking, offsets, and other buzzwords by the truckload.  Some are mostly good (banking), some are mostly bad (offsets), and some are in between (safety valves and circuit breakers).  All of them are things we should care about getting right, but they're also things where, inevitably, we're going to have to compromise.

Auctioning permits is different.  This is the one thing that ought to be a deal-breaker in any cap-and-trade plan.  I talk about this in my cap-and-trade piece in the print magazine this month:

4. There 's no such thing as a free permit. One of the key issues with any cap-and-trade system is how you allocate permits. Power plants would like to get them for free, and at first glance this seems appealing. If you set the overall carbon cap at 90 percent of current levels, and allocate only that number of permits, that should reduce carbon without raising prices for the consumer. After all, the power plants didn't have to pay for the permits, so there are no costs to pass along. Right?

Oddly enough, no. The economic theory involved is a little hairy, but those permits have a value on the open market, and that means that in many cases marginal producers can make more money selling their permits than by producing power. They'll only be willing to produce power if they can raise prices enough to make the power-producing business more profitable than the permit-selling business, and eventually everyone will jack up prices to follow suit.

This may sound abstract—even a bit fantastical—but it's absolutely real. In fact, when permits in phase one of Europe's ETS system were handed out for free, electricity prices rose and power companies pocketed a windfall profit (which Britain's Department of Trade and Industry estimated at about $1.1 billion a year in the UK alone). Dale Bryk, an attorney with the Natural Resources Defense Council (NRDC), puts it bluntly: "If you ask them point-blank if they'll charge customers for free permits, they won't tell you. But they know they will."

A better way is for the government to hold an auction to set the price of permits. This has a couple of extremely salutary effects. First, it puts everyone on a level playing field (since Congress has no ability to allocate permits to favored interests). Second, and even better, the money from selling the permits goes to the federal government, not to the carbon emitters. That's a pretty useful revenue stream, one that would probably start out at about $20 to $30 billion per year and go up steadily as the cap came down and the price of carbon permits increased.

There are loads of special interests who hate the idea of a 100% auction, of course.  But once you start giving away permits, you'll never stop.  It is, plain and simple, a massive giveaway to existing power plants, and as the Europeans learned it makes a mockery of any serious cap-and-trade plan.

This all sounds very wonky, but it's a hill to die for if you care about reducing greenhouse gases.  Without a 100% auction, cap-and-trade is a bad joke.  Somebody needs to tell Bingaman to start listening to the coal lobby a little less and start caring about effective public policy a little more.

UPDATE: I was going to add something about the politics of this, but the post was already long so I decided to skip it.  Luckily, Matt Yglesias does it for me:

When you’re a Democratic Senator, you often face a conflict of interests. On the one hand, you would really like to sell out to anti-reform special interests. On the other hand, you can’t openly portray yourself as someone who wants to sell out. One appealing option is to do what Bingaman does here and just cite unspecified political obstacles. Not that the obstacles aren’t real. But in the U.S. Senate they’re also people, with names. But instead of naming names, Bingaman’s just offering the vagueness play. He’d love to do the right thing, but it’s “unlikely” to happen. And everyone can do this. Nobody needs to be the Senator who’s against a public plan in health care, or who’s against a 100 percent auction. Instead, everyone’s just being practical for the sake of someone else.

Quite so.

Debt Collectors: How Low Will They Go?

| Fri Mar. 6, 2009 1:26 PM EST
Not only are local DAs farming out debt collection to sleazoids who then get to be pretend to be law enforcement officials, but guess what else? Debt collectors are now gunning after the dead. From the NYT: 
"The banks need another bailout and countless homeowners cannot handle their mortgage payments, but one group is paying its bills: the dead.
Dozens of specially trained agents work on the third floor of DCM Services here, calling up the dear departed’s next of kin and kindly asking if they want to settle the balance on a credit card or bank loan, or perhaps make that final utility bill or cellphone payment.

The people on the other end of the line often have no legal obligation to assume the debt of a spouse, sibling or parent. But they take responsibility for it anyway."

You have to read the whole piece to understand just how scuzzy their methods are, especially at a time when so many are financially devastated. They give these operators special classes in faking empathy and other forms of emotional blackmail. The only bright spot is that about half of DCM's grave robbers don't make it past the first 90 days of torturing an unemployed person whose mom just died. Yoga and foosball is enough to get the rest of them through the day, though.

Imagine DCM going bankrupt (i.e. corporate death). Would it still pay the debts it had legally incurred but was no longer legally responsible for? Yeah, that could happen.

What to Do About the Miserable February Job Numbers

| Fri Mar. 6, 2009 12:28 PM EST

The big news of the day today is the fact that the economy shed 650,000 more jobs in February and the job loss numbers for the previous two months were revised upwards. The nationwide unemployment rate is now 8.1 percent, the highest in 25 years. Since December 2007, which is the technical start of the current recession, the economy has lost 4.4 million jobs.

We gathered the thoughts of Dean Baker and James Galbraith, two of the most prominent economists on the left. Baker makes it clear that not only are things bad, they are worse than expected:

The one piece of somewhat good news in this report is that wages are continuing to rise, with nominal wages rising at 3.5 percent annual rate over the quarter. However, everything else in this report is extremely bad. The economy is in a free fall with no obvious breaks in place. The recent forecasts used in analyzing the stimulus and the budget, which projected 8.5 percent unemployment for the 4th quarter, now look impossibly optimistic. The unemployment rate is likely to hit 8.5 percent by March and will almost certainly cross 9.0 percent by the early summer. Without substantial additional stimulus, it could cross 10.0 percent by year end. This report shows that recent economic projections were overly optimistic.

Galbraith suggests the following steps to spur recovery:

1. Increase Social Security 30 percent across the board
2. Declare a full holiday on the payroll tax.
3. Cut the age of eligibility for Medicare to 55.
4. Make general revenue sharing open-ended.
5. Do the National Infrastructure Fund, also open-ended.
6. Put a moratorium on all foreclosures, and turn over the problems to a new HOLC.
7. Unleash Sheila Bair on the banks.

Somebody mail this to the freaked out Obama economic team.

Dealing With Iran

| Fri Mar. 6, 2009 12:12 PM EST
Over at Marc Lynch's place, Gary Sick argues that the change in U.S. policy toward Iran since Obama took office is much greater than most people think:

There is a flurry of signaling by the US — both positive and negative: keeping pressure on Iran (Stuart Levey and restrictions on banks), reassuring Israel (appointment of Ross) & Arabs (Hillary's downplaying of expectations at Sharm el-Sheikh), providing some funding for the Palestinians while pressing Israel to relax entry into Gaza, renewing an opening to Syria, talking about cutting US nuke stockpiles (US Ambassador Schulte in Vienna), talk of including Iran in Afghan security discussions (Holbrook), willingness to remove (anti-Iran) missile defense in E Eur while cajoling Russia on Iranian missile development, nice words from Obama (sometimes), harsh words from Susan Rice (always?), tough words from Adm Mullen, more soothing words from SecDef Gates, unified declaration about Iran by all five UN veto powers at the IAEA (without threatening new sanctions or return to the UNSC), etc etc.

Sick may be overstating things a bit here, but that's still a pretty impressive list — especially, as he says, for a guy who's only been in office for six weeks. But will it work?  Iran has run hot and cold in the past, and either by coincidence or design they seem to run hottest when we're running coldest, and vice versa.  Because of this, there's rarely been any sustained period during the past couple of decades when both sides have been genuinely interested in rapprochement, and that seems like it might be the case right now too.  For that reason, my own guess is that this dance is going to take quite a while to produce any results.  Obama and Hillary Clinton are probably going to have to keep up the pressure, keep up the overtures, stay calm in the face of provocations, and display almost inhuman patience for several straight years if they want to see any progress.  We'll see if they can do it.

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Quote of the Day - 03.06.09

| Fri Mar. 6, 2009 11:21 AM EST
From Fox News chief Roger Ailes, talking about Barack Obama's efforts to turn America into a socialist hellhole:

"I see this as the Alamo.  If I just had somebody who was willing to sit on the other side of the camera until the last shot is fired, we'd be fine."

Last night I was channel surfing and happened to land on Sean Hannity's show for a few minutes.  Marian walked in and wondered why I was watching it.  "Doesn't he just increase your blood pressure?" she asked.

I'd never really thought about it, but I realized right then that he doesn't.  Lou Dobbs increases my blood pressure.  Chris Matthews increases my blood pressure.  Maureen Dowd increases my blood pressure.  But Hannity?  Rush Limbaugh?  Glenn Beck?  Nah.  They seem so frankly clownish, and so completely insulated in their little cocoon of viewers who already agree with them anyway, that they just don't bother me much.  That's probably a little too lackadaisical on my part — they can still drive cards and letters into congressional offices, after all — but the fact is that they've lost their ability to push my buttons.  Their particular brand of freak-showism just doesn't seem so scary these days.

Nobody Left

| Fri Mar. 6, 2009 10:43 AM EST
Atrios responds to the latest government plan to restart the credit markets via partnerships with hedge funds and private-equity firms:

They made bad bets when they at least theoretically thought they could incur losses. Now the cunning plan is to hope they make good bets even though...no chance of losses!

This is all going to end really badly.

I have some longer thoughts on this subject that I haven't quite had the nerve to write and post yet, but the short version is this: everyone in the financial industry made bad bets over the past seven years.  So if you think the government shouldn't work with any of these guys, it means you think the government should refuse to work with the financial industry, full stop.  That's just not practical, though.  Even if you think they're all idiots, we have to work with someone, and the idiots are all we have.

Now, as it happens, I don't think they are all idiots.  But that's the post I haven't written yet.  Maybe later.

Staffing Trouble

| Fri Mar. 6, 2009 2:02 AM EST
Three stories, one theme.  First, from the Wall Street Journal:

Two candidates for top jobs at the Treasury have withdrawn their names from consideration, complicating efforts by Treasury Secretary Tim Geithner to staff his department at a time of economic crisis, according to people familiar with the matter....People familiar with the matter said Ms. Nazareth and Ms. Atkinson withdrew in part because of the long vetting process, which had dragged on for weeks and included several rounds of intense questioning.

Second, Bloomberg:

President Barack Obama’s economic advisers are increasingly concerned about the U.S. Senate’s delay in confirming the nominations of Austan Goolsbee and Cecilia Rouse to the White House Council of Economic Advisers....Their stalled nominations serve as another reminder that Obama may find it difficult to live up to his campaign promise of changing the partisan culture in Washington. Democratic Senate Majority Leader Harry Reid of Nevada "was outrageous in abusing the Senate’s advise and consent powers," said Tony Fratto, a former Bush spokesman. "So no one should be surprised if Senate Republicans follow the precedent he set."

Finally, Ryan Grim at the Huffington Post:

Barack Obama made no secret of his feelings for "Washington lobbyists" during the campaign and vowed that they wouldn't be staffing his White House. The implementation of that rule, however, has led to a number of consequences that Obama could never have intended....Lobbyists who for years have fought for workers' rights, environmental protection, human rights, pay-equity for women, consumer protection and other items on the Obama agenda have found the doors to the White House HR department slammed shut.

So: endless vetting is spooking good candidates, Republicans are throwing temper tantrums, and anti-lobbyist goo-gooism is draining the progressive pool.  Meanwhile, Rome is burning.  This isn't very encouraging news.

"Sophisticated and Fact Based"

| Fri Mar. 6, 2009 1:31 AM EST
Earlier this week David Brooks penned a cri de coeur about the "revolutionary fervor" he found lurking beneath the covers of Barack Obama's budget proposal for next year.  The next day he started getting pushback from White House aides.  By the time he'd finished talking to them, Brooks says, he didn't find himself completely convinced:

Nonetheless, the White House made a case that was sophisticated and fact-based. These people know how to lead a discussion and set a tone of friendly cooperation. I’m more optimistic that if Senate moderates can get their act together and come up with their own proactive plan, they can help shape a budget that allays their anxieties while meeting the president’s goals.

Fact based is a big improvement over the past eight years, no?  All by itself, that demonstrates a certain pragmatism and moderation even if Obama does favor things like carbon pricing and universal healthcare.

On the other hand, Brooks also came away from his conversations convinced that the Obama administration is "plotting politically feasible ways to reduce Social Security as well as health spending."  I wonder if he's going to get another set of phone calls about that on Friday morning?